Reboot Burlington Telecom!

If you’re from Burlington, Vermont you are probably already familiar with the financial trouble that our municipal fiber optic network, Burlington Telecom, is in. A couple of weeks ago a group of nine telecom and business professionals offered to help the City revive Burlington Telecom. I believe very strongly in keeping Burlington Telecom a local, community enterprise so our company volunteered our services to help this “group of nine” communicate their message. The result, Reboot BT, was launched last week.

Since then, several people have shown their support using the #rebootbt hashtag on Twitter. Hopefully many have also been calling their City Councilors to tell them that they support pursuing this plan. Bill Simmon posted the letter he wrote to Councilor Keogh. Today Councilor Shannon sent the following draft resolution to her fellow City Councilors (I’ve been told that this is public information which is why I’m posting it here):

Sponsors: Councilor Shannon

Resolution to Consider offer of Reboot BT

WHEREAS on February 17, 2010 a group of 9 telecom and business professionals offered both their expertise and substantial financial resources to support Burlington Telecom;

WHEREAS the Mayor has chosen not to engage this group in discussion;

WHEREAS Burlington Telecom was created by resolution of the city council and it remains subject to the orders and ordinances, and ultimate oversight, of the city council;

WHEREAS the City must give thoughtful consideration to all options available to address the financial distress of Burlington Telecom and the City of Burlington;

WHEREAS this offer has become known as “Reboot BT”; and

WHEREAS many Burlington citizens have urged the Mayor and City Council to reconvene the Blue Ribbon Committee to give consideration to the proposal of “Reboot BT”; and

WHEREAS the City Council views this proposal more as a short term proposal that may open the door to more partnership options and a stronger negotiating position in the longer term; and

WHEREAS the administration and Council have taken steps to hire financial advisors to negotiate both with our current lender, CitiLeasing, and with potential partners;

THEREFORE BE IT RESOLVED, the City Council requests that the Blue Ribbon Committee reconvene for the purpose of evaluating the offer from Reboot BT and advising the Council as to whether or not the City should entertain this offer and under what conditions and terms this offer could benefit the City of Burlington.

BE IT FURTHER RESOLVED, the City Council requests that the Blue Ribbon Committee review and evaluate any other offers that the administration deems pertinent to the discussion and decision making process.

It’s my understanding that this resolution will be discussed at Monday’s City Council meeting. If you’re a Burlington citizen and support the Reboot BT plan, then please contact your City Councilor if you haven’t already.

2 Comments

I’m a bit skeptical of this plan. I don’t think it is necessarily the best option for BT subscribers, taxpayers or the city. I think BT should first of all be a wholly municipal project. The city has funded, organized and committed a lot of effort into it and there’s no reason to give that up. A privately run operation will produce the same lackluster results seen with other supposedly “broadband” providers in Vermont.

There’s no reason to sell all or any partial stake of BT at this stage in the economy. If BT is a financial mess than why are people coming out of the woodwork to privatize it? Also, clearly these 9 “reboot” people aren’t paying with cash and are lining up financing elsewhere. If they can find financing than why can’t the city do the same? If the taxpayer has held the risk of BT for this long, they should hold on and reap the reward and not sell off early.

Finally why is it that people like Nulty and Montroll who had a stake in managing BT previously should get another chance?

Clearly, this proposal is a compromise that satisfies all political sides, but I think its selling-out a good investment.

Aaron, I hear your skepticism. If the plan were to create a for-profit enterprise then I don’t think I would support it (it would still be better than Comcast or FairPoint getting a hold of it since we need more competition, not less). While it’s still possible for a nonprofit to sell out, it’s a lot less likely to happen. Like you, I would prefer that BT stay owned by the City (but probably under new management). Under the Reboot BT plan it would at least still be a local, community enterprise.

You asked, “If BT is a financial mess than why are people coming out of the woodwork to privatize it?” I’ve asked that same question myself. I asked, at a public hearing, why we as taxpayers haven’t been given the option to invest in Burlington Telecom. I think it’s an investment well worth making (or, more correctly, continue to make).

The City can find financing, and in fact *has* found financing. Unfortunately the political will is not there to go through with this financing. Also, the Blue Ribbon Committee (BRC) has recommended that the City not refinance. The main issue is that BT is over-capitalized and any new financing would be based on the City’s good will, not the assets that BT owns (this is what the company offering financing has said). A related problem is that BT’s Certificate of Public Good (CPG) states that they can’t put taxpayer money at risk. In other words, we can’t really “invest” in BT we can only borrow against BT’s collateral (which is already maxed out).

Both Nulty and Montroll’s involvement in BT was before the financial crisis that BT is currently facing. It’s hard to tell with everyone pointing fingers, but from what I can tell this financial crisis was almost entirely caused by the *current* management of BT (or should I say mismanagement of BT). Besides, they’re willing to put up their own money to get past the immediate crisis. Obviously, as you said, the long term financial right-sizing of BT would involve outside money.

Personally, what I would like to see with *any* third party is that the City keep a 51% stake in BT and/or have a contractual option to buy back BT over time if the citizens of Burlington so choose.